Correlation Between Deutsche Bank and New Oriental
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and New Oriental at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Deutsche Bank and New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Bank Aktiengesellschaft and New Oriental Education, you can compare the effects of market volatilities on Deutsche Bank and New Oriental and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Deutsche Bank with a short position of New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and New Oriental.
Diversification Opportunities for Deutsche Bank and New Oriental
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deutsche and New is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education and Deutsche Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Deutsche Bank Aktiengesellschaft are associated (or correlated) with New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and New Oriental go up and down completely randomly.
Pair Corralation between Deutsche Bank and New Oriental
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 1.11 times more return on investment than New Oriental. However, Deutsche Bank is 1.11 times more volatile than New Oriental Education. It trades about 0.07 of its potential returns per unit of risk. New Oriental Education is currently generating about 0.07 per unit of risk. If you would invest 19,290 in Deutsche Bank Aktiengesellschaft on August 25, 2024 and sell it today you would earn a total of 13,710 from holding Deutsche Bank Aktiengesellschaft or generate 71.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.52% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. New Oriental Education
Performance |
| Timeline |
| Deutsche Bank Aktien |
| New Oriental Education |
Deutsche Bank and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and New Oriental
The main advantage of trading using opposite Deutsche Bank and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, New Oriental can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in New Oriental will offset losses from the drop in New Oriental's long position.| Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Glencore plc | Deutsche Bank vs. iShares Trust | Deutsche Bank vs. US Bancorp |
| New Oriental vs. Deutsche Bank Aktiengesellschaft | New Oriental vs. Cognizant Technology Solutions | New Oriental vs. United States Steel | New Oriental vs. The Bank of |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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